Small Employers Health Care Access Act

The Small Employers Health Care Access Act makes health insurance plans available to small-business employers regardless of the health claims experience of a group of employees or the health status of any individual employee in that group. Here are the benefits offered by this law:

Guaranteed Issue

Insurers are required to offer all health benefit plans to small-business employers with one to 50 employees on a guaranteed-issue basis. However, if you are a sole proprietor or the sole officer of your corporation seeking coverage, you are considered a “one-life group.” One-life groups must apply for coverage during an annual open enrollment period that lasts the entire month of August. Regardless of when you apply during the month of August, your coverage will not start until the first day of October.

Guaranteed issue means that the policy must be issued regardless of the employer’s or an individual employee’s claims history, pre-existing condition(s) or health status. Insurers and HMOs may ask health and medical questions, but the answers cannot be used to deny enrollment. Although enrollment cannot be denied, an insured person may be subject to a waiting period before medical claims are paid for certain pre-existing conditions.

For an employer with fewer than two employees, a pre-existing condition is an illness that is diagnosed or treated, or a condition for which an ordinarily prudent person would seek treatment, 24 months prior to the purchase of a health insurance policy, if the employee has had no prior coverage. The pre-existing condition period lasts only 12 months for those who have had prior coverage under a different health plan. However, that 12-month period will be reduced by the length of time that you have satisfied a pre-existing condition clause under the prior coverage (see “Portability” in the following section).

For an employer with two or more employees, the definition of a pre-existing condition is “a physical or mental condition, regardless of the cause, for which medical advice, diagnosis, care or treatment was recommended or received within six months of the enrollment date or time of application.” For these employees, the maximum waiting period is 12 months, minus any time satisfied under a pre-existing condition clause with a prior health plan (see “Portability” in the following section).

For employers with two to 50 employees, an insurer that offers group health insurance coverage may not impose any pre-existing condition exclusion for pregnancy.

It is important to remember that insurance companies may refuse to renew coverage for fraud or intentional misrepresentation by the employer of the insured. Therefore, it is important for employees to provide “truthful and accurate” health and medical information to insurers and HMOs.

Portability

Portability allows a covered person or dependent to meet the waiting period for a pre-existing condition only once, even if the individual changes their employer or insurer. To qualify, you must have continuous coverage with no more than a 63-day break (the maximum number of days you can go without coverage before your portability rights expire).

Some employers require employees to be employed for a period of time before they can join the company’s health plan. While this employment requirement frequently lasts three to six months, this delay will not count against the 63-day requirement for joining another health plan in order to qualify for exercising your portability rights.

Standard and Basic Health Plans

The standard and basic health plans allow employers and employees to compare prices and services between health coverage companies (insurers and HMOs). The coverage of these plans is identical for each company, but they differ in price, service and out-of-pocket expenses.

The standard plan, with some limitations, includes coverage for:

• inpatient hospitalization,
• outpatient services,
• newborn children,
• child care supervision,
• adopted and foster children upon placement in the residence,
• mammograms,
• handicapped children,
• emergency or urgent care outside the service area, and
• prescriptions.

The standard plan has higher premiums and lifetime benefits, but lower out-of-pocket expenses.

With the basic plan, the monthly premiums are lower, but your out-of-pocket expenses are higher. For more information, see the chart beginning on page 20 of this guide.

Remember that you should consider your needs and those of your employees before deciding on any health plan. Ask your agent for complete explanations of all options. Do not waive your rights to these plans without reviewing them first.